Question 1

What does Aption do?

Accepted Answer

Aption provides equity pooling solutions for founders, employees, and shareholders. We are a well funded company, and our co-founding team has decades of experience in finance, tax and venture capital.

Question 2

What is equity pooling?

Accepted Answer

Equity pooling is when a stock or option owner exchanges, or “pools”, their own interests with those of others. Specifically, they trade some of their position’s economics for those of a different position.

Question 3

Can you give me an example of Equity Pool?

Accepted Answer

Here’s a real example of a pool creation and exit that has happened with Aption. We have altered the company names, for discretion.
- An individual has stock or options in Discord worth $500,000. They believe in the company – but this represents most of their net worth and it’s too much exposure.
- They pool 10% of their with 4 other equally promising companies - Anthropic, Databricks, Canva, and Neuralink. They each contribute $50,000 of paper value.
- The value of the pool is now $250,000 and you own 20%.
- One of those companies has an exit. for $150,000 or 3x its entry price. This $150,000 is distributed to the pool and the Discord holder receives 20% of it – $30,000. They still retain the rest of their stake in the pool, as well as the remaining $450,000 position in Discord.
- And so on. Whenever any of those 5 individual positions has an exit, they will receive ~20% of that distribution. Whether it has an exit for $25,000, $50,000 or $1 million.
This continues until all of the positions have exited or become worthless. And of course, you retain the rest of your stock or options that you did not contribute.

Question 4

Why should I join an equity pool?

Accepted Answer

- Diversification – own a portfolio; reduce dependency and exposure on a concentrated,
illiquid position.
- Sooner, more frequent liquidity – exposure to many other companies’ liquidity events.
- Insurance – more likely that your paper position will be worth something, vs.
nothing.
- Create additional liquidity the opportunities down the road, by owning a more-fungible portfolio, instead of a single business.
- Reduce stress.
- Build business relationship with other pool members.

Question 5

Does equity pooling cost me any money?

Accepted Answer

No. It costs no cash.

Question 6

How does Aption make money?

Accepted Answer

We take a % of the economics that are contributed to the equity pool.The exact amount depends on factors such as valuation and duration, but it ranges from 5% to 10%.
We don't get paid until there is a liquidity event. At this point, Aption and the pool members get paid out together.

Question 7

What’s the process of joining an Aption pool?

Accepted Answer

First, you match to an appropriate pool, based on your holdings. You have the opportunity to understand what is in the pool, before choosing to accept or decline the match. Depending on the particular pool, the existing members might need to vote to approve your entrance.
Afterwards, you complete a KYC and AML. We validate that you own your shares and what they were recently priced at. You sign a couple contracts.
That is it.
Then, as exits happen, you receive your share of the distribution. Based on the value of your commitment to the pool, relative to those of others.

Question 8

How is the privacy and security of user data ensured during the KYC and AML process?

Accepted Answer

At Aption, your trust and privacy are of paramount importance to us, and we are committed to maintaining the highest standards of security, to safeguard your data.
During our Know Your Customer (KYC) and Anti-Money Laundering (AML) process, we employ advanced security measures to safeguard user information.
- All user sensitive data is encrypted using Dual-layer server-side encryption with DSSE-KMS.
- DSSE-KMS is meticulously designed to meet the National Security Agency CNSSP 15 for Federal Information Processing Standards (FIPS) compliance.
- It also adheres to the Data-at-Rest Capability Package (DAR CP) Version 5.0 guidance, for two layers of Commercial National Security Algorithm (CNSA) encryption.
Furthermore, we strictly limit access to this encrypted data, ensuring that only a limited number of senior Aption employees with specific authorization have the privilege of accessing it.
This multi-layered approach to data security guarantees that your information remains confidential and protected, throughout the KYC and AML verification processes.

Question 9

How are commitments valued?

Accepted Answer

We typically rely on last round valuations, which we validate with third-party sources.

Question 10

Can I decide who I pool with?

Accepted Answer

Yes. One of our products allows total flexibility and customization.

Question 11

Are there pre-built pools for me?

Accepted Answer

Yes, we offer Aption index products as well.

Question 12

How do you make sure that the companies coming into my pool are good startups?

Accepted Answer

For our index product, we only target companies that recently raised money from credible investors. A portfolio of recently-funded startups is a reasonable approach to capturing and protecting your value as these companies are all investable by definition. This approach leads to strong and reasonable pools.
For our marketplace products, we offer our investors full control to elect or reject a match. If they do not know enough, or if we cannot help them understand enough about the opportunity, they are never forced to accept a match with any given company.

Question 13

Can I do both a custom pool and an index pool?

Accepted Answer

Yes. Many choose to participate in multiple pools.

Question 14

Can you tell me more about your structure?

Accepted Answer

In each country, we have built a structure that is designed to be clean and tax-advantaged.
These structures are based on mechanisms and products that are used in other fields, such as public equity markets or insurance.
In the US, the closest comparable structure are Prepaid Variable Forward Contracts, which are frequently used in public markets. We have updated this structure to work for private markets.

Question 15

How reliable is your structure?

Accepted Answer

Our equity pooling structure was built with thousands of hours of tax, legal and finance work with dozens of top-tier professionals. It rests on pre-existing mechanisms and products, as well as bodies of tax and securities law. It is also supported by third-parties. Some of the top founders and executives in the world are using our solution.

Question 16

How will my exits be taxed?

Accepted Answer

In every jurisdiction tax is treated separately and any given individual may have a specific tax situation that means individuals should seek personal tax advice. Generally speaking in the US, long term positions will be treated as long term capital gains, and short term positions as short-term gains.

Question 17

What if a startup in my pool doesn't have an exit for a long time?

Accepted Answer

The pools can persist for as long as they need, until all the companies have exited or have been liquidated.

Question 18

Are there any ongoing costs of money or time, associated with being in a pool?

Accepted Answer

No.

Question 19

Do I need board approval from my company to join an equity pool?

Accepted Answer

No. Shares are not being transferred. This falls outside the jurisdiction of the board of directors.

Question 20

Do I need to get a waiver on a VC right at first refusal?

Accepted Answer

No. Shares are not being transferred. This falls outside the jurisdiction of the board of directors.

Question 21

Do I need to disclose that I joined an equity pool?

Accepted Answer

No, but we recommend that in the interest of transparency, you inform your board or management.

Frequently Asked Questions

01.What does Aption do?

02.What is equity pooling?

03.Can you give me an example of Equity Pool?

04.Why should I join an equity pool?

05.Does equity pooling cost me any money?

06.How does Aption make money?

07.What’s the process of joining an Aption pool?

08.How is the privacy and security of user data ensured during the KYC and AML process?

09.How are commitments valued?

10.Can I decide who I pool with?

11.Are there pre-built pools for me?

12.How do you make sure that the companies coming into my pool are good startups?

13.Can I do both a custom pool and an index pool?

14.Can you tell me more about your structure?

15.How reliable is your structure?

16.How will my exits be taxed?

17.What if a startup in my pool doesn't have an exit for a long time?

18.Are there any ongoing costs of money or time, associated with being in a pool?

19.Do I need board approval from my company to join an equity pool?

20.Do I need to get a waiver on a VC right at first refusal?

21.Do I need to disclose that I joined an equity pool?